I faced a similar situation. I developed a test data generator while there is a lot of such product out there. Some are free others are paid.
It was 8 years ago and me and my product are still there and most of my competitors as well.
I think that people looking for free stuff will never pay - whatever the reason why they don't want to pay. Let them be users since they can talk about you and you product. Being free is a strong value for community and viral communication. Build a free offer for your product
Those who a ready to pay will not pay for the product. They will pay for a solution. That means you have to build domain segment specialization of your product. For example, provide a free generic version of your app and paid customizations for banking? Retail etc
Think of service + product as a bundle. If your ae not big enough to be credible with services then get partner and give them the service part.
These are few ideas, but remember not to believe all advices. Make you own path, experiment, best advices ever are those of your customers and users.